Reading the latest tweet from a smart realtor Andrew LaFleur I got inspired to write about doing due dilligence on a resale condos.
We know it's important to review the status certificate and condo by-laws, but very few people take the time to review the condo board minutes. From my experience, reading the condo board minutes will give you valuable information on the building state of repair and how the condo board operates. This information will could save you a tremendous amount of money and stress.
So what do you look for when reviewing the condo board minutes?
Thomas Beyer, a specialist in doing condo conversions in Alberta, gives great advice:
Look for:
- Discussion of major items in minutes of the condo board meetings, i.e. water leaks, new roof, bed bugs, plumbing issues, structural issues, windows, rotten balconies etc.
- Potential cash-calls/special assessments and why
- Reserve fund health vs. age of building (get help with an experienced property manager or lawyer on this)
- If a newer building: discussion of significant maintenance fee increases
- If a newer building: any disputes with developer or pending Tarion issues
- Any special meetings outside the usually annual AGM for major decisions
- Any budgeted / future major expenditures and anticipation of funding these same expenditures through reserve fund or special assessment (i.e. you think it is a good deal .. but in 2 months you're on the hook for a $35,000 special assessment to bring reserve fund current and fix all windows and a new roof )
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4 comments:
I'm a big fan of resale condos, and you're right on the money! I'm working on a similar post, although from another angle.
99% of all buyers do not bother to get a copy of the AGM minutes and read them. But anyone who has ever lived in a condo and been to an AGM knows that all the dirt on a given condo building is discussed there!
great tip B
Its a shame there are so few smart realtors;
Look for the percentage of [absentee] rental owners that may vote in blocks by proxy. They will constantly defer any repairs or required maintenance for short term cash gains that eventually cripple a building future financial commitments.
This can seen where many MURB buildings from the early 80's were flipped into the consumer ownership pool.
David Pylyp
Living in Toronto
Thanks for the great save! :)
Paula M
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